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Monday, 14 May 2018

When Angela Merkel had visited Trump in Warshington on April 27 nothing really happened. Both put a good face on things and declared a yawn inducing “unity despite differences”. Despite all the pressure Warshington had built up so thoroughly, the vassal did not rebel against his master, but left him empty handed. I am not a Merkel fanboy, quite the contrary, but right now her Teflon qualities come quite in handy. Let me explain.

Blow the trumpet with empty pressure

Trump had threatened German car makers with a 35% import tariff. This is a “smart” move in so far as that the car industry indeed is Germany’s biggest industry, but if he really ever did that, it wouldn’t hurt German economy too much. The market share of the US for German car manufacturers in 2016 was 10%, which is a lot. They sold 1.33 million cars in the US (not “millions” like Trump claimed). However, 800.000 of those were already produced in the US. The rest has been manufactured in Mexico, which is a NAFTA country. Even if Trump were to negotiate, pardon, extort a harsher NAFTA deal, it would be hurting American companies as well and certainly not leading to 35% tariffs. BMW, Mercedes, VW, they all have plants in the US, however and ironically, most cars built in the US by German car manufacturers are exported overseas. There is no reason to think the industry couldn’t stomach tariffs that affect only a few cars manufactured in Mexico at best. So, Trump might have thought he was practising his martial art of the deal by using extortion, but I’m sure Merkel was briefed accordingly.

What’s more interesting are the goods the EU is contemplating to retaliate with just in case: bourbon, Levi’s, Harley Davidson. Is there a better indicator about the state the US economy is in? If the US wants to go to trade war, fine, but it is usually commendable to pack suitable weapons before entering the battlefield. There is absolutely nothing the US could fight a trade war with. Besides, and this is something I hope German and Chinese strategists take into consideration: essentially they’re giving away their goods for free. What do they get in return? A currency that is most likely soon to be worthless junk. And even worse, the bulk of consumer spending in the US, 70% of its GDP after all, is based on debt. Housing debt is skyrocketing again. Essentially we are exactly where we were short before the crash of 2008. Germany alone had lost about €1 trillion in worthless US junk in 2008, which the banks had bought repackaged and camouflaged as “investments”. I doubt the bankers have been smarter this time, because investment bankers are major idiots who see the world through Excel sheets. And then there is the big question: how many crashes can the US economy still land before it will stay down, knocked out dead? Or before all of its citizens but a few gated communities live in tents? The biggest debtors of the US are Japan, China and Germany. They should really find ways to get rid of this toxic waste and convert it to gold instead. Alchemy! The best way for the EU to retaliate would be to sanction US bonds and thus force European investors to invest in Europe instead, or find other incentives for them to avoid the toxic waste coming out of the US.

Anyway, Trump exempted the EU from his bogus, extortionary trade tariffs – for now at least, he says. All other differences between Germany and Warshington remained intact. All these issues go so completely against the heart of German economic and geopolitical interests but also against Germany’s self-concept of its role on the international stage and German diplomacy, that I just can’t see them falter. It would be like firing a gun at the inside of your knee. German elites might slap themselves in the face to please their American masters, for example by sanctioning Russia, but not the knee, never the knee. Vassal or not, standing firmly on the ground is at the core of German mentality. Also, Germany is not the meek, guilt-ridden nation it once was anymore.

Defense spending to the rescue of US economy

There is, however, one self-slap Germany could do without hurting its legs. It wouldn’t even do much more than tickle the face a little and that would be to increase the defense budget to the demanded 2% of the GDP. There surely are political forces in Germany who would love to see that. Atlanticists and Russophobes, who have infected all of German political, academic and public life like in no other western (!) European country. Ursula von der Leyen, our mother-of-seven career girl and defensive ministress, for example. However, the center of the Atlanticist epidemic sits among our mainstream media hacks. This is the biggest leverage Warshington has on Germany, because the media essentially controls the politicians.

Therefore, consequently, since the Ukraine crisis we’ve been bombarded with doomsday news about the deplorable state of the Bundeswehr’s military hardware. Whether it’s true or not, I don’t know, but it’s curious that such news comes simultaneously with demands on increasing the German defense budget by American think tanks like the German Marshall Fund and now by Donald Trump. If it is true, helicopters and aircraft must have been inoperable long before. It wouldn’t surprise me, because from what I’ve heard from friends who’ve been in service, the management of the Bundeswehr is, well, unfortunate to say the least.

However, Merkel’s lip service to increase the defense budget in 2019 has already been invalidated in practice when finance minister Olaf Scholz published his budget plan for the next four years just five days after Merkel’s flying visit. The defense budget will indeed be increased, from €37 billion to €38.5 billion this year, and it is planned to be increased to €42 billion by 2021 which amounts to €1.25 billion increase per year. Measured against Germany’s 2017 GDP of €3,686.6 billion this would be a “massive” increase from 1.0% to 1.04% for this year, a ridiculous two fifth of a tenth of a percentage point. However, if you consider GDP growth of recent four years you will find the numbers 1.9%, 1.7%, 1.9% and 2.2% respectively. All economic indicators look great for Germany, so growth rates around 2% for the future are realistic. Let’s do a silly thought experiment and project linearly for ten years and see how an increase of 2% in GDP and an annual increase of €1.25 billion in defense budget will work out regarding his master’s wishes for the lackey’s defense budget. Mind you, this is truly a silly thought experiment, because lineary projection in Excel sheets is what bankers do and they are, as mentioned above, idiots. Also, we simply don’t know what will happen. I expect to hear the Death Knell of the Anglo-American empire far earlier, for example, by failure of its most vital organ, the Dollar, and that would change everything in ways we cannot even anticipate. But here are the numbers. All monetary values are in billion euro, the last column is the interesting one:

Year

GDP

GDP Incr. (2%)

Defense Budget

DB Incr.

Def. Bud. % of GDP

2017

3,686.60

73.73

37

1.25

1.00

2018

3,760.33

75.21

38.25

1.25

1.02

2019

3,835.54

76.71

39.5

1.25

1.03

2020

3,912.25

78.24

40.75

1.25

1.04

2021

3,990.49

79.81

42

1.25

1.05

2022

4,070.30

81.41

43.25

1.25

1.06

2023

4,151.71

83.03

44.5

1.25

1.07

2024

4,234.74

84.69

45.75

1.25

1.08

2025

4,319.44

86.39

47

1.25

1.09

2026

4,405.83

88.12

48.25

1.25

1.10

Can you see how ridiculous this is? Even if Trump gets a second term, which personally I doubt very much at the moment, he won’t see his wet dream for Germany fulfilled. Besides, even if it was going to be the case, Germany wouldn’t be making large arms purchases in the US. It’s not as if Germany and her neighbors didn’t have their own efficient arms industries. By far the most weapons of the Bundeswehr, from aircraft, submarines, ships, tanks and guns, are European made and often technologically superior (mainly German submarines and tanks) to what the US can offer. Would France and Germany stop their plans to develop their own 5th generation fighter jet and buy F-35s instead? Nah, remember the knee. Why buy terribly expensive foreign hardware and be left behind technologically when you can develop your own and both use and sell it? Trump desperately wants to create jobs – or so he says, he is actually destroying them should trade tariffs be implemented – so he seeks to sell weapons because what he and his employers really want is to strengthen the notoriously weak US military industrial complex. Either way, the bottom line of the meeting is: Germany shrugs, defies his master’s demands and rather concentrates on completing Nord Stream 2, which will provide for tremendous income and political leverage.

Personally, I think Germany should work on its own version of an S-400 anti-aircraft defense, Kalibr cruise missile, and similar electronic warfare systems like Russia appears to have. I’m convinced German engineers could do that. Such technological advance would be beneficial in any case, but I absolutely see it as a possibility that in a not too distant future, Germany might have to fight off the occupation forces of the United States. But that’s just me and my male intuition, I hope I’m wrong. Other than the US, or rather the US regime, Germany has no enemies and thus doesn’t need to raise anything. A proper, working (!) defensive military like that of Switzerland would be all that’s needed – just in case. For that purpose such formidable weapon systems in domestic production would be perfect. It could also satisfy the powerful German arms industry as it would mean big domestic contracts as a substitute to unmet Atlanticist demands.

German-Russian cooperation – that which must not, can not be

One word about Nord Stream 2. I dunno if it is reported in any international media, it hardly is in German media, but the EU circus around it is a ham-handed joke. I can’t prove it but it smells heavily of US meddling. Now that Germany has started to build the pipeline, the usual suspects, that is the UK, Denmark and what I like to refer to as the Idiot Belt (Baltics, Poland, Ukraine, often extended by the Scandinavian countries – Finland has permitted construction though) are going bezerk, trying to sue for stopping the project etc. The Baltic idiots have even been to Warshington in March because of it. For what? Suggesting more tariffs? Seeking reassurance that the Americans are willing to frack their country to Swiss cheese for their LPG energy security? Their Russophobia is, as always, baseless. Russia has never used its gas or oil to pressure the EU into anything. Europe has been buying Russian/Soviet gas since the 1960s and it has always been delivered reliably. The only exceptions happened when the ever so smart Ukrainians had sudden outbursts of PMS. This thing is gonna be built, regardless of what the former empire now US aircraft carrier or the Idiot Belt think. Europe is dependent on Russian gas, that is simply a reality. Russia is an absolutely reliable partner relying on revenue from that gas, so where is the problem? Maybe it really takes 70+ years under US occupation to understand who’s reliable and who isn’t, so the Baltics and Poland might come to their senses by 2060 – given Warshington can hang on for so long.

The real reason Warshington and London oppose Nord Stream 2 is the same why two world wars and a Cold War with all its devastating side effects all over the world have been fought until today. The whole geopolitical arc of suspense since the late 19th century is about the Anglo-American establishment, sea powers, trying to prevent Germany and Russia – now extended by Iran and China, land powers, from cooperating and thus establishing Eurasian integration with the Americans left out (Britain will be on board, they’re already member of China’s Asian Infrastructure Investment Bank). As the first Secretary General of NATO Lord Ismay described the purpose of NATO in 1952: to keep the Americans in, the Russians out, and the Germans down. This has been Anglo-American policy since about 150 years. Now they’re wetting their pants because Nord Stream 2 is a major step forward in German-Russian rapprochement and cooperation. Since they cannot crap all over China’s One Belt, One Road project, they are trying it with Nord Stream 2. The Idiot Belt is always willing to dance to their tune and thus rabble-rouses against it. In the end they won’t be able to prevent Eurasian integration anyway, and the Idiot Belt will bashfully ask to be integrated as well. The world is approaching a multipolar world with a German-Russian-Chinese juggernaut as its cornerstone.

The cranky bully and the happy lackey

Is it any wonder the US is cranky? Year by year, Germany and China switch places as the world richest exporter. Even more so, Germany’s current account balance (CAB), that is the trade balance, is by far the largest in the world in absolute amount. In contrast, that of the US is by far the lowest despite them ranking 2nd in total exports. That, of course, must hurt their pride given that Anglo-Saxons are always so keen on rankings and hierarchy. Although, it should be added that this doesn’t go without problems for Germany domestically, let alone for the Euro zone. But that’s an issue for a different article.

With its enormous economic power and magnificent diplomatic relations in every direction Germany can very well be counted as a global power of its own right, even if completely different from the other three, namely America, Russia, and China. What the apostles of raising Germany’s defense budget, be it domestic Atlanticists, the arms lobbies or King Parting himself, don’t understand is the special kind of power Germany has, which would be undermined by military adventurism. Our military alpha mom Ursula von der Leyen and her buddies from all the Atlanticist think tanks always talk about that if Germany wants to take more international responsibility, it will need more military power for reassurance, usually followed by the snippy remark to stop leaving the dirty work to others. This is complete bollocks, and here’s why:

First, every single war the “West” has fought since the bombing of Serbia has been fought in the interest of the chief-boss of colonial war nations: the US, usually followed by a fawning UK. If it goes against one of its former colonies, the French usually feel committed to throw a few bombs into the mix as well. Therefore, it is safe to say that since about 20 years the “West” is fighting FUKUS wars. This is not to say, Germany wasn’t part of it, it played a vicious role in breaking up Yugoslavia and bombing Serbia, it was and still is part of pummeling Afghanistan for something they haven’t done, they provided AWACs in the bombing of Syria, and of course they’ve been a massive force behind the Maidan putsch. But except for breaking up Yugoslavia, none of it was in the interest of German power politics, not even slicing Kosovo out of Serbia. Had Germany been in the lead, the Middle East would still be intact. So what dirty work are they talking about? I’d rather say that Germany managed to stay mostly out of other people’s dirt. What the apostles of more defense spending actually mean when they say “taking more international responsibility” is doing more dirty work for an increasingly broke Warshington.

Second, German power lies in its massive economy and silent but brilliant diplomacy, which could be much, much better if we didn’t have this cranky bully sitting on our shoulders, shouting commands in our ears. After the war Germany was not only in ruins, its reputation was understandably FUBAR. While the Soviet occupational zone, the DDR, didn’t have much freedom, they still managed to reconcile with East European countries and soon played the second most important role within the context of Soviet imperialism. The same is true for the Anglo-American occupational zone, the BRD, and the context of Anglo-American imperialism. Ironically, during the Cold War the Anglo-American occupiers gave West Germany much more freedom than they did afterwards or try to withhold now. This very often led to terrible results as well. West Germany was one of Pinochet’s closest allies and trade partners, it sold the chemicals and knowhow to Saddam Hussein necessary to gas Iranians and Kurds, and still today it is one of Saudi Barbaria’s main weapons suppliers, not to mention the submarines that gave the Zionist colony second strike capability. Nonetheless, Germany’s success is based on trust, on building and maintaining trust, and it was and still is hugely successful. Why should it put that in jeopardy by becoming a military bully like the FUKUS countries?

Third, why should Germany ignore its history? I don’t mean any past guilt for Nazi crimes, I mean a simple look at it. Weimar republic aside, Germany has always prospered in peace time yet terribly suffered in war time, from the Thirty Years War to both world wars, and blatantly failed when it tried to militarily bully others. The only thing Germany needs right now is freedom from the Anglo-American empire to remember and develop its true, mostly benevolent nature.

Applause, Mr President, applause

If it wasn’t for the serious looming danger of war, we should all thank Trump and his administration for their efforts. O’Bomber brought Russia and China together, Trump has brought the two Koreas to what seems to be serious reconciliation and, with pulling out of the Iran nuclear deal, he not only managed to ruin even the last residue of US credibility but also to put Germany into the “West’s” driver’s seat and thus to bring it closer to Russia, China, and of course Iran. Ha! The irony… it’s like when somebody tries to be gravely serious and ends up being involuntarily funny.

What Trump needs to learn is that his business tactics a) don’t work very well in politics and b) they only work in America. It’s a cultural thing. I’ve been working for two different American owned companies for almost three years in total, so I learned a thing or two about how the American mindset works in business, mostly by observation. First, they demand a lot, so the best tactic is to offer them as little as possible and never to make any concessions or promises. If you can’t avoid it, make sure to stay below of what you can deliver. Second, never expect them to keep their promises. I am not saying they’ll never keep them, but it’s just better not to expect anything. They like to pretend something else was agreed upon if they want to see a deal altered, or that it was a misunderstanding, or whatever. Just don’t expect that a deal is a deal, it’s not, it is just something temporary along the line. Third, they want everything done quickly. Just be patient, remain calm, and stoically stand your ground. It’ll drive them crazy as they don’t understand the concept of quality, but again, remain calm and be friendly. Fourth, they tend to be disproportionately confident and beyond any criticism, so it’s best to pretend to criticize someone or something else or learn the artful skill of making your criticism sound like praise. Just don’t shy away if criticism is needed. The worst thing to do in the face of a narcissist is to succumb to their ways as it just enables them. You need to trick them.

These are just my own personal observations of American businessmen, not of Americans in general, and surely not meant to offend anyone (except American businessmen perhaps). However, I believe Merkel has been coached by someone, because Trump truly is a caricature of what I’d just described. She has handled him very well. I’m not saying he is a joke, not at all, but his narcissism is written all over his hairdo and behavior. It needs a Teflon lady who might be many things, but narcissistic or easily impressed are not any of them.

His obnoxiousness just doesn’t work and apparently neither he nor anyone around him seems to get it. With Germans, or Europeans in general, you have to deal differently if you want to achieve something. Business is based on trust and trust is based on friendliness and reliability, not on demands and extortion. If you still can’t leave it and want to twist arms, you will have to make sure that your arm is strong enough. Right now America’s arms (pun intended) are weaker than they have ever been in history. This is a new experience they cannot handle, which makes it dangerous, because their other arms are still dangerously strong, and narcissistic rage is almost impossible to contain once in motion. Right now, Warshington makes the impression of a narcissistic bully ready to go off at any moment, while his friends are turning away one by one in shrugging nonchalance.

The staffers of the White House should do a little soul-searching, maybe early morning meditation circles with incense and yoga in the garden, and earnestly ask themselves if there really is anything left they can threaten countries like Germany, China, Russia, and Iran with that can yield results other than mutual destruction, and whether it is even worth it. The Dollar has an expiry date stamped all over its face and they should rather make use of it as long as there still is something left by diverting military spending into domestic investments in infrastructure (a converse Berlin Wall to Mexico doesn’t count) and education (direly needed) among other things. But they are doing the exact opposite. Right now it seems that Trump is slashing all governmental structures and putting everything on the military. This is a very dangerous sign. What if Warshington is willing to go all alone, I mean only with their symbiotic Zionist and Saudi partners in crazy, against Iran as the empire’s last defiant struggle?

In mainstream media coverage it appeared as if the meeting between Merkel and Trump was futile because nothing had happened, but in truth, Trump achieved nothing, yet Merkel and her Teflon style achieved everything. No tariffs, no sanctions on Nord Stream 2, that’s all Germany needed. That Trump would perform a pactum interruptum and pull out of the Iran nuclear deal was to be expected. I doubt Merkel was delusional enough to think otherwise. Germany is now as independent and sovereign as it hasn’t been in 73 years – I hope they’ll seize the opportunity and not once again duck away in fear of a leadership role. The US is as isolated as it has never before been in its history, standing there with egg in their face, brooding and fuming over why no one loves them anymore.

Sergio’s Bio: A child of the Cold War, Sergio’s political imprint started early when his parents became activists of the 1980s peace movement. With a Portuguese-German background he grew up to become a patriot but not right, left but not liberal, a fan of Marx but not a socialist, and many more of such but-nots. An ardent reader of books, he despises groupthink, hypocrisy, euphemisms and ideology. He prefers clarity, sincerity, history, geopolitics, philosophy, and economic/monetary theory. He makes a living as a programmer and IT consultant, but his passion lies in intellectual sparring, culinary delight, music, traveling and cycling.